Worse than groupthink: Budget deficits are the new WMDs

"The US went to war with Iraq because of WMDs that could never plausibly be used, unless we went to war with Iraq - if they even existed at all," writes Rosenberg [Reuters]

Ten years ago, the US invaded Iraq based on a lie - the lie that Iraq possessed weapons of mass destruction that threatened America's security. And as blogger David Atkins recently pointed out, there's an almost exact parallel between the way in which the US went to war against Iraq 10 years ago and how the US is going to war against deficits today. In both cases, marginalising critical questions and dissenting voices are key.

More on the parallels shortly. But first, let's reconsider the WMD lie. You didn't need a security clearance to figure it out. Iraq was where it always had been, right smack dab in the middle of the oil-rich Middle East. The US was still in North America, with the Atlantic Ocean, the Mediterranean Ocean and more between the two of them. And the US still imposed "no fly zones" over Iraq which ensured that any WMDs that might exist would not possibly leave Iraqi air space, much less, somehow cross two oceans to threaten the US, which Iraq had precisely zero aircraft capable of doing.

The idea that Saddam Hussein would turn his WMDs over to others to use against the US was only slightly less absurd - even if we weren't talking about turning them over to a mortal enemy like Osama bin Laden. Saddam was a brutal dictator, after all, a man accustomed to calling all the shots. No way he was going to slip his trump card - if he had it - to someone else. The idea that Iraq really had WMDs - after months of UN inspections had failed to find any trace of them - was difficult to believe, at best. The idea that they posed an imminent threat to the US was patently absurd.

And yet, that was the premise for war.

Oh, yes, I almost forgot. If it turned out that Saddam really had WMDs after all, then the one thing we could do to change all the calculations would have been to invade Iraq. There was no possible way for Saddam to use them against the US or US forces outside of Iraq. And even if there were, he'd only be signing his death warrant if he did use them. But if the US attacked Iraq with the intention of overthrowing him, not only could those alleged weapons be used, the deterrence threat against using them would have turned into an urgent motivation to use them.

So, to summarise: the US went to war with Iraq because of WMDs that could never plausibly be used, unless we went to war with Iraq. If they even existed at all, that is.

Debt hysteria marginalisation

Put this way, the whole thing seems absurd - which it is. But that's exactly whyit was so important that critical, contrarian voices be stifled. Without their exclusion, the whole house of cards collapses in the twinkling of an eye. As Atkins points out, those marginalised weren't just "the likes of Joe Wilson and Valerie Plame - though that was part of it.

The most important marginalisation was of a softer kind", which he describes as the multi-layered construction of what "Every Serious Person" knew - that "Colin Powell would never deceive the American People" that George Bush was a straight-shooter, that "UN weapons inspectors were a weak joke", etc, etc, etc. "To believe otherwise was unthinkable," Atkins writes. "It was the sign of a deeply unserious mind, unfit for the politics of adults."

And thus, he concludes, "To truly learn the lesson of Iraq is to ask oneself what critical policy issue of the day carries the same force of conventional wisdom and marginalisation of contrarian voices." Which brings us to "the bipartisan march toward deficit reduction and the bizarre exclusion of Keynesian or countercyclical solutions from acceptable discourse on the economy" - a policy fixation that's actually guaranteed to prolong how long it takes for a full economic recovery, and thus make budget matters even worse.

A classic illustration of debt hysteria marginalisation occurred in late January, when Nobel Prize-winning economist Paul Krugman appeared on MSNBC's Morning Joe, where co-host Mika Brzezinski compared him to global warming denialists, while the eponymous Joe Scarborough followed up with an op-ed "Paul Krugman vs The World", which claimed, "his worldview runs counter to almost all mainstream economists". This was ludicrous, as Business Insider Deputy Editor Joe Weisenthal quickly pointed out:

The article says: Paul Krugman favours running deeper deficits, but folks like the chief of the Council on Foreign Relations, Erskine Bowles, Scarborough himself, Mika Brzezinski, Steven Rattner, and former Joint Chief chairman Michael Mullen all disagree with Krugman.

Note that zero of the above people are "economists" let alone mainstream economists.

Weisenthal went on to provide a list of 10 economists, plus a budget-focused Congressman, all agreeing with Krugman's lack of worry about the deficit. It was, Weisenthal noted, "just a partial list, but one that covers conservatives, liberals, Wall Street economists, and former government officials."

One could just as easily put together a similar set of links of Middle East and intelligence experts who weren't panicked over Iraq's WMDs before the US invasion. It's not that sane, well-informed experts aren't out there. It's that America's political elites simply don't want to hear from them. New York magazine's Jonathan Chait wrote:

"The positions themselves are not what is at issue here.It is the belief of the debt scolds that their issue holds such overweening importance that it can only be considered in moralistic terms. To Joe Scarborough and the whole team of anti-debt television personalities, calibrating out the ideal terms of debt reduction is like calibrating out how much to spend fighting Hitler. The fiscal scolds have so successfully inculcated their moralistic urgency about debt, so thoroughly dominated the news agenda, that millions of people like Joe Scarborough think it is self-evidently insane and evil to in any way minimise the awesome scale of the crisis."

Of course, Saddam Hussein was repeatedly compared to Hitler too. Chait's critique here parallels Atkins' in drawing a connection between the collective mindsets involved. What best encompasses them both, I believe, is the social psychology construct of a moral panic, as I argued in an earlier column, "'Don't panic!' - The Hitchhiker's Guide To Imperial Politics".

Appeasers of Islamofascism

While many have looked back at the Iraq invasion and described it as an example of groupthink, that term refers to technocratic decision-making in a small-group setting. It does typically involve multiple key defective practices that certainly applied, such as incomplete survey of alternatives and objectives, selection bias in gathering information, failure to examine risks of the preferred choice and to work out contingency plans.

But, although groupthink might plausibly describe what happened inside the Bush administration, it simply can't apply to how the entire nation went to war. Nor does it account for "softer kind" of marginalisation that Atkins wrote about. In contrast, moral panics are wide-ranging social phenomena as Wikipedia explains:

According to Stanley Cohen, author of a sociological study about youth culture and media called Folk Devils and Moral Panics (1972) who coined the term, a moral panic occurs when "[a] condition, episode, person or group of persons emerges to become defined as a threat to societal values and interests".Those who start the panic when they fear a threat to prevailing social or cultural values are known by researchers as moral entrepreneurs, while people who supposedly threaten the social order have been described as "folk devils".

In my earlier column, I noted that "Moral panics often centre around crime, drug use and youth activities", but they can take on a much broader scope as well, as these two examples show.

In the case of the Iraq war, the moral entrepreneurs were the neocons - particularly those associated with the Project for A New American Century - who'd been campaigning for the invasion of Iraq since at least 1998, and who promoted the term "Islamofascism" to cast virtually all Muslims as folk devils on the global stage and to make it easy to demonise potential war critics as apologists for or appeasers of Islamofascism.

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If America's enemy was Islamofascism rather than al-Qaeda, there were literally no limits to the scope of war that could be justified, both as morally warranted and vital for America's survival. If America's own commitment to a framework of universal rights and the rule of law was severely damaged in the process, the intensity of the panic generated was such that the contradictions of fighting authoritarianism with authoritarianism rarely if ever troubled the self-described "adults".

In the case of today's debt and deficit hysteria, the moral entrepreneurs are the deficit scolds, particularly those associated with Wall Street billionaire Pete Peterson's decades long war on Social Security and Medicare, and its latest incarnation "Fix The Debt", or the Koch brothers/tobacco industry's decade-long project to create the "Tea Party" movement, beginning with the first Tea Party website in 2002, as described in a new study.

The folk devils in their moral panic scenario take on multiple guises - they are the "greedy geezers" as Alan Simpson likes to call those over 65 on Social Security and Medicare, Romney's "47 percent" of his private fundraising pitch, and the "takers" versus the "makers" of his public campaign, to name just a few. And, of course, anyone who fails to join the crusade against them can readily become a folk devil as well.

In this moral panic, debt is an evil so great that tens of millions of unemployed Americans have simply ceased to matter as a focus of legislative attention. Imaginary evil trumps real human suffering.

The tragic irony is that the best short-term strategy for reducing long-term debt is rapid return to full employment - which requires government spending to replace missing private sector demand. What's more, with interest rates so low that government can borrow at negative real interest, such spending has never been more economical. This is Paul Krugman's actual position, and it's one that's broadly shared in the economics profession, despite what deficit scolds like Joe Scarborough would have you believe.

An empire in decay

If this position were to get a fair hearing, it would very likely carry the day politically, since the actions and priorities involved are broadly popular - despite the deficit scolds' success in spreading their panic to the public at large. But the moral panic framework allows this very popularity to be stood on its head and used against it. Krugman himself recently called attention to a blog post by macroeconomist Simon Wren-Lewis on politicians' psychological movites for austerity. Here's the nub:

Promising tax cuts or spending increases without spelling out the implications in terms of paying for any additional borrowing is what politicians do more often than not.

Most of the time they can get away with it, but I suspect they either feel guilty about the implicit deception, or fear they will be found out. So when the market starts to punish fiscal profligacy, it is as if a parent has discovered the child’s guilty secret. (The market is seen by many as a mysterious deity.) The politician wants to repent (or at least be seen to repent), and atone for past sins. After eating too many pastries, we go on a crash diet. After deficit bias, we have austerity.

This is not rational policymaking, it's not even adult psychology. It's child psychology attempting to act "adult", when the adult thing to do would be to fix the problem, and worry about appearances later. However, Wren-Lewis goes on to say that during hard times:

"Political fortunes will be maximised by taking the path of apparent virtue. The electorate, many of whom are recovering from over indulging themselves, will empathise with political 'self-restraint' and reward apparent virtue."

This certainly describes the 2010 electorate. And yet, as I noted in my last column, the thoroughly Keynesian House Progressive Caucus alternative for replacing the sequester was far more popular than the more austerity-oriented alternatives. Thus, under the thrall of deficit moral panic, the apparently popular thing to do is to take an "adult" stand against the "childish" desires of the majority of the American people. But it's only popular as long as alternative voices and views remain marginalised. Which is why Atkins concludes:

[T]he real lesson of 2003 has far less to do with the rush to war in the Middle East, and far more to do with the rush to exclusionary conventional wisdom among the Very Serious People in Washington.

This repeated reliance on sweeping moral panics is symptomatic of an empire in decay, an empire far too dominated by special interests to ever seriously engage in problem-solving for the common good. Real grown-up action is impossible in such a situation, and so the faux adults take charge, condemning all who dare to disagree.

Paul Rosenberg is a California-based writer/activist, senior editor for Random Lengths News, where he's worked since 2002. He's also written for Publishers Weekly, Christian Science Monitor, LA Times, LA Weekly and Denver Post. In 2000/2001, he was a principal editor/writer at Indymedia LA. He was a front-page blogger at Open Left from 2007 to 2011.